Weigao Orthopaedic(SH:688161) Guoxin Securities·2025-05-28 10:25Investment Rating - The investment rating for the company is "Outperform the Market" [6][32]. Core Views - The company has shown a significant recovery with a 48% year-on-year increase in net profit attributable to shareholders in Q1 2025, despite a 16.6% decline in revenue due to sales model integration [1][10]. - The company is actively expanding its market share and customer coverage by adjusting its operational strategies in response to the stable execution of centralized procurement policies [1][2]. - The company has launched a new stock incentive plan aimed at achieving a compound annual growth rate (CAGR) of 18.1% in net profit from 2025 to 2028 [1][31]. Financial Performance - In 2024, the company achieved a revenue of 1.453 billion (up 13.2%) and a net profit of 224 million (up 99.2%) [1][5]. - The gross profit margin for 2024 was 65.7%, with a notable decrease in sales expense ratio to 33.1% (down 10.6 percentage points) [3][23]. - The net profit margin improved to 15.7% in 2024, reflecting enhanced profitability [3][23]. Revenue and Profit Forecast - The company forecasts net profits of 254 million, 312 million, and 377 million for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 13.3%, 23.2%, and 20.9% [4][32]. - The projected revenue for 2025 is 1.646 billion, with a growth rate of 13.3% [5][34]. Product Line Performance - The revenue from the spine product line in 2024 was 421 million (down 10.9%), but excluding the impact of centralized procurement price reductions, the sales volume increased by 21.37% [2][20]. - The trauma product line saw a revenue increase of 24.0%, while the joint product line revenue surged by 46.1% with a sales volume growth of 51.7% [2][20]. - The sports medicine product line revenue reached 44.25 million, marking a nearly fourfold increase [2][24]. Strategic Initiatives - The company is implementing an overseas expansion strategy to establish sales channels and advance research projects globally [2][24]. - The stock incentive plan involves granting 7.2 million shares to 55 key personnel, with performance targets linked to net profit growth [31][32].